The dishonesty and fraud of fractional-reserve banking and fractional-reserve Social Security

The dishonesty and fraud of
fractional-reserve banking and fractional-reserve Social Security

By Mencken’s Ghost

March 11, 2011

I recently visited my local Bank of America branch to
speak with a so-called personal banker about something.After the matter at hand was taken care of,
the following conversation took place:

Me:I’m a
writer working on an article about fractional-reserve banking and would
appreciate a few minutes of your time to talk about the subject.Do you know what fractional-reserve banking
is?

Banker:No.

Me:In simple
terms, it’s when a bank takes money deposited by a customer and loans the same
money nine times to other people.It’s
essentially the reason that banks get into financial difficulty and why the
Federal Deposit Insurance Corporation came into being.

Banker:Oh, I
think I’ve heard about that.

Me:My
question is this:When someone opens an
account at your bank, does he sign a contract saying that it’s okay to loan his
money nine times to other people?

Banker:I
don’t think so.

Me:Well, is
it spelled out somewhere in the official papers that he is
given?

Banker:I
don’t know, but I can give you a set of everything we give to customers when
they open new accounts.

Me.That’d be
great.Thanks a lot.

When I returned home, I read everything that she had
given to me, including the 45-page “Deposit Agreement and Disclosures.”There was no mention of the bank loaning out
a depositor’s money multiple times, but there was plenty of information about
privacy rights, account security, overdrafts, fees, and the
FDIC.

Does this strike you as odd?It strikes me as odd, even though I am
well-versed in the history of banking and the inner-workings of banks and the
Federal Reserve system.Heck, I even
understand such arcana as the different ways of measuring the money supply and
the velocity of money.

The failure of banks to disclose what they do with
your money would be akin to a long-term parking garage at the airport not
telling you that they are going to loan your car to nine other people while
you’re away.It also would be like a
drycleaners not telling you that they’re going to let other people borrow your
clothes in between the time you drop them off and pick them
up.

But these are hypothetical examples.The best analogy is not hypothetical.It’s
the real-life example of the government taking your FICA contributions during
your working years and giving the money to other people, without disclosing that
your deposits are not held in reserve in your own account.Amazingly, the U.S. Supreme Court has ruled
that the government is under no legal obligation to uphold its promised Social
Security benefits or return your contributions.As with banking, Social Security is a fractional-reserve system.

At best, these systems are dishonest; at worst, they
are fraudulent.Yet both banking and
Social Security are run by the same government that recently established a new
Consumer Financial Protection Bureau, which will be headed by Elizabeth Warren,
a Harvard professor appointed by President Obama.

Her first action should be to blow the whistle on the
dishonesty and fraud of the president, Congress, and Federal Reserve Chairman
Ben Bernanke.

______________

“Mencken’s Ghost” is the nom de plume of an
Arizona writer
who can be reached at ccan2@aol.com.